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Everydaymoney.ca Blog

Commodities
Friday,11 May,2012

Gold Futures Lower as Risk Appetite Shrinks
Comex gold futures prices are trading moderately lower Friday morning and have hit a fresh 4.5-month low as most markets are under selling pressure following the surprise news that market-place-heavyweight JP Morgan has suffered a massive trading loss. The key outside markets -- crude oil and the U.S. dollar index -- are also in a bearish mode for the precious metals Friday, as the dollar index is firmer and crude oil prices are lower. June gold last traded down $10.60 at $1,584.90 an ounce. Spot gold was last quoted down $8.70 U.S. an ounce at $1,585.25. July Comex silver last traded down $0.518 U.S. at $28.66 U.S. an ounce.

Technically, June gold futures bears have the solid near-term technical advantage and have gained fresh downside momentum this week. A bearish weekly low close on Friday would add to the downside technical momentum. A nine-week-old downtrend is in place on the daily chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,644.00 U.S. Bears’ next near-term downside price objective is closing prices below technical support at the December 2011 low of $1,528.60 U.S. First resistance is seen at $1,600.00 U.S. and then at Wednesday’s high of $1,607.00 U.S. First support is seen at the overnight low of $1,572.00 U.S. and then at $1,560.00 U.S.

July silver futures prices hit another fresh 17-week low Friday and are in a nine-week-old downtrend on the daily bar chart. The silver bears have the solid near-term technical advantage as they are poised to produce a technically bearish weekly low close on Friday.

Silver bulls’ next upside price breakout objective is closing prices above psychological resistance at $30.00 U.S. an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the December 2011 low of $26.50 U.S. First resistance is seen at the overnight high of $29.05 U.S. and then at $29.50 U.S. Next support is seen at the overnight low of $28.475 U.S. and then at $28.00 U.S.

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